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Unions and the productivity performance of multinational enterprises: evidence from China

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Abstract

This paper uses the economic census data of multinational enterprises (MNEs) in the Chinese manufacturing industry to investigate the effects of Chinese unions on firm productivity. We show that Chinese unions have a significant “collective voice” effect by participating in a wide range of decision-making and production-related activities. The empirical evidence suggests that the presence of Chinese unions in MNEs is positively associated with enterprise productivity. We also find that the union productivity effects are stronger in MNEs than those in domestic private firms and that the effectiveness of unions is more significant in skill-intensive industries.

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Notes

  1. The Census covers 5,168,303 legal entities out of a total of 5,323,235 legal entities in 2004; thus, the coverage rate is approximately 97%. We only have access to the data of manufacturing industries.

  2. State-owned limited liability enterprises are classified into SOEs. The joint enterprises between SOEs are treated as SOEs. The joint enterprises between COEs are treated as COEs.

  3. The information of value added is only available for the limited sample, which includes most of the SOEs and large and medium non-state enterprises (with total sales roughly above 5 million Yuan). The unit of value added and fixed assets is RMB 1000 Yuan.

  4. This has been a standard specification in union productivity studies since the pioneering work of Brown and Medoff (1978).

  5. In our sample, there are 112,392 private firms, and 39,540 private firms are unionized.

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Acknowledgements

This paper is funded by China Social Science Foundation Grant (17BSH076), Social Sciences and Humanities Research Council of Canada Grant (890-2016-4023), and Stephen Jarislowsky Foundation Research Grant (Dr. Tony Fang) and Western Sydney University Academic Development Program Funding 2018, Western Sydney University School of Business Professional Development Funding 2017 (Dr. Youqing Fan), and National Nature Science Foundation of China (No. 71433002) (Dr. Ying Ge).

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Authors and Affiliations

  1. School of Management, Xihua University, Chengdu, China

    Tony Fang

  2. Department of Economics, Memorial University of Newfoundland, 230 Elizabeth Ave, St. John’s, NL, A1C 5S7, Canada

    Tony Fang

  3. School of Economics, Zhejiang University, Zhejiang, China

    Ying Ge

  4. Western Sydney University, Sydney, Australia

    Youqing Fan

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  1. Tony Fang
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  2. Ying Ge
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Correspondence to Tony Fang.

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Fang, T., Ge, Y. & Fan, Y. Unions and the productivity performance of multinational enterprises: evidence from China. Asian Bus Manage 18, 281–300 (2019). https://doi.org/10.1057/s41291-018-00052-0

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